Economics

Income inequality is one of the favorite bogeymen of the left these days. Instead of asking the important question as to whether life is improving--after all, a 2011 Heritage Foundation study shows that most of America's "poor" live much better lives than what most people think of as poverty--their focus is on the widening income gap between the proverbial C.E.O. and janitor. Of course, the cynic in me thinks that this is because such a focus gives cover for the redistributive policies that our friends on the left favor these days. "Who cares that the rich bear by far the greatest share of the tax burden," liberals ask us. "They don't pay their 'fair share.'" Here is a fun parlor game: the next time this topic comes up, inquire as to just how much more the much-maligned wealthy should pay in taxes in order to be "fair." Better still, ask why narrowing the income gap is more important than improving the earnings of all. You will get some interesting answers and/or blank stares.

Tax season is here, and the government has a license to hunt. Nearly two-thirds of Americans are caught like wide-eyed deer in the light of their computer screens. The percentage of people who filed their taxes online using services such as H&R Block and Turbotax has increased 27 percent since 2008.

The burgeoning population of middlemen between your pocket and the government’s coffers is growing. As the tax-filing industry has increased, the length of the 101-year-old tax code itself has swelled to 73,954 pages. That’s 60 copies of The Lord of the Rings trilogy or 62 copies of Atlas Shrugged, if that’s your credo. The IRS instructions explaining the tax code drone on for 90 pages.

At least phone psychics have colorful personalities. The OECD has a new report out that blasts its own economists for having foggy crystal balls with regards to their recent forecasts. The Wall Street Journal reports:

The Organization for Economic Cooperation and Development Tuesday said it underestimated the degree to which economic and banking setbacks in one country would have negative impacts on others, leading it to consistently forecast stronger growth than actually materialized in the wake of the 2008 financial crisis.

But in the latest analysis of forecasting failures by an international financial institution, the OECD said it didn't share the International Monetary Fund's view that misjudging the impact of budget cuts on growth was a crucial error. (Emphasis mine)

President Obama loves himself some minimum wage banter. The man who never ran so much as a lemonade stand knows more than you about how micro- and macro-economics work, especially as it pertains to small businesses around the country. After all, he went to Harvard. He's a lawyer. Magazines told me he was the smartest fella ever to become commander-in-chief. He's a pragmatist. A great orator. And very good at basketball.

So that's him. But what about the rest of us?

As my pal Andrew Johnson reported at NRO, the president is never one to let direct questions about the real-world impact of Obamacare get in the way of a prime chance to extol the virtues of raising the minimum wage:

Janet Yellen was sworn in yesterday as the fifteenth chair and first woman to head the Federal Reserve. She replaced Ben Bernanke, who presided over his final session during last week’s meeting of the Federal Open Market Committee (FOMC). The Fed announced after that meeting that it would once again taper its monthly asset purchases. Yellen’s installation and the continuation of tapering indicate that Bernanke’s retirement is not the end of an era or an unprecedented turn, but rather business as usual at the central bank.

At the Fed’s January 28-29 meeting, the FOMC announced that it will reduce the scale of quantitative easing. The reduction in asset purchases is $10 billion, bringing the monthly total down from $75 billion to $65 billion. The last reduction was announced during the Fed’s December meeting in 2013, and markets reacted positively. This announcement, however, came on the heels of a badweek for equity markets.

Twenty years ago today, the 6.7-magnitude Northridge Earthquake struck the San Fernando Valley 20 miles northwest of downtown Los Angeles, killing 60, injuring 7,000, and damaging more than 82,000 buildings. The price tag for the quake was a record $20 billion in property damage, only about half of which was insured.

The two decades since Northridge have seen significant efforts to mitigate earthquake risk through retrofitting, as well as the creation of a state agency in California dedicated to providing earthquake insurance to all who seek it. Alas, despite those steps, there is significant evidence that not only are we less prepared for a major quake today than we were in 1994, but that the financial brunt of any such disaster would mostly fall squarely on the shoulders of U.S. taxpayers.

The left’s clairvoyant wonks are pleased with themselves this week. The Obama administration recently announced that 24 percent of enrollees on the Obamacare exchanges have been between the ages of 18 and 34. That was enough for Ezra Klein to herald “The death of Obamacare’s death spiral” in today’s Wonkblog. The death spiral was the prediction made by many that not enough young people would dive into the Obamacare risk pools, leaving them filled with high-cost elderly patients and driving up premiums.

Of course, the ratio is mostly what we’re worried about, not the number; getting an extra 100,000 young people to sign up while you get an extra 500,000 old people doesn’t improve the stability of the insurance markets -- it makes them more unstable.

New York's new mayor, Bill de Blasio, in his inaugural speech, denounced people "on the far right" who "continue to preach the virtue of trickle-down economics." According to Mayor de Blasio, "They believe that the way to move forward is to give more to the most fortunate, and that somehow the benefits will work their way down to everyone else."

If there is ever a contest for the biggest lie in politics, this one should be a top contender.

While there have been all too many lies told in politics, most have some little tiny fraction of truth in them, to make them seem plausible. But the "trickle-down" lie is 100 percent lie.

It should win the contest both because of its purity -- no contaminating speck of truth -- and because of how many people have repeated it over the years, without any evidence being asked for or given.

Liberty is the prevention of control by others. This requires self-control and, therefore, religious and spiritual influences; education, knowledge, well-being. -Lord Acton

It was during my first full year of seminary (circa 2008) at Trinity Evangelical Divinity School that I finally heeded the counsel of multiple professors and attended my first Acton University conference. Held each summer in Grand Rapids, Mich., "Acton U" is an extraordinary collection of students, professors, writers, journalists, and thinkers of the first order who gather together for the express purpose of exploring the "free and virtuous society" in a civil, intellectually stimulating environment. What started with a few dozen participants a decade ago has organically grown into an event that boasts nearly 1,000 attendees. Those enrolled in the conference are treated to four days of fascinating conversations, engaging lectures, world-renowned guest speakers, delicious meals, and good company.

In 1777, a correspondent told Adam Smith that the British loss at the Battle of Saratoga worried him. “If we go on at this rate, the nation must be ruined,” he said. But Smith was unconcerned. “Be assured, my young friend, that there is a great deal of ruin in a nation.” Supporting those distant colonies was not an economic proposition anyway. Smith published figures to that effect in The Wealth of Nations (1776). Getting out of what would become the United States was probably the best policy.He knew, in short, that it took more than battles lost or colonies abandoned to ruin a nation. President Obama and the Democrats know that too. But they have a more cynical take on Adam Smith’s adage.Over generations the U.S. has accumulated plenty of capital (and I don’t just mean our assets). Subconsciously, the president and his allies seem to have decided: “Let’s go ahead and spend that capital for our own political advantage.” The country will survive. “Social justice,” meaning equality, is what they say they want.

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